Bureau of Internal Revenue
Lumagui: Government Contractors have to present an Updated Tax Clearance before Final Settlement of Government Contracts
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. has issued Revenue Regulation No. 17-2024 (RR No. 17-2024) which requires government contractors to secure from the BIR an updated tax clearance certifying that the contractor does not have any outstanding tax liabilities, and that the contractor has duly filed its latest income and business tax returns and paid the corresponding taxes due, prior to the final settlement of a government contract.
“Government Contractors have to show that they do not have any outstanding tax liabilities before the final settlement of a government contract. The BIR will require an updated tax clearance. Otherwise, the Government has the power to suspend the final settlement of the government contract” Commissioner Lumagui stated.
Before the issuance of RR No. 17-2024, a BIR tax clearance is submitted by a government contractor during the procurement process as an eligibility requirement.
“Part of our commitment to Excellent Taxpayer Service is ensuring that before Government Contractors are paid, they are cleared of any tax liabilities. In this way, the BIR will be able to protect the taxes collected from our hardworking taxpayers against Government Contractors who do not even pay their taxes” Commissioner Lumagui stated.
RR No. 17-2024 also provides that the amount of final settlement on the government contract which was suspended for failure to present an updated BIR tax clearance will be subject to a tax lien in favor of the government to satisfy the contractor’s outstanding tax liabilities.
Commissioner Lumagui also issued Revenue Memorandum Order No. 002-2025 prescribing the policies, guidelines, and procedures in the processing and issuance of tax clearance certificate for final settlement of government contracts. ###
Lumagui: Government Contractors have to present an Updated Tax Clearance before Final Settlement of Government Contracts
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. has issued Revenue Regulation No. 17-2024 (RR No. 17-2024) which requires government contractors to secure from the BIR an updated tax clearance certifying that the contractor does not have any outstanding tax liabilities, and that the contractor has duly filed its latest income and business tax returns and paid the corresponding taxes due, prior to the final settlement of a government contract.
“Government Contractors have to show that they do not have any outstanding tax liabilities before the final settlement of a government contract. The BIR will require an updated tax clearance. Otherwise, the Government has the power to suspend the final settlement of the government contract” Commissioner Lumagui stated.
Before the issuance of RR No. 17-2024, a BIR tax clearance is submitted by a government contractor during the procurement process as an eligibility requirement.
“Part of our commitment to Excellent Taxpayer Service is ensuring that before Government Contractors are paid, they are cleared of any tax liabilities. In this way, the BIR will be able to protect the taxes collected from our hardworking taxpayers against Government Contractors who do not even pay their taxes” Commissioner Lumagui stated.
RR No. 17-2024 also provides that the amount of final settlement on the government contract which was suspended for failure to present an updated BIR tax clearance will be subject to a tax lien in favor of the government to satisfy the contractor’s outstanding tax liabilities.
Commissioner Lumagui also issued Revenue Memorandum Order No. 002-2025 prescribing the policies, guidelines, and procedures in the processing and issuance of tax clearance certificate for final settlement of government contracts. ###
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October 24, 2024
Lumagui: BIR Raids Large-Scale Illicit Cigarette Factory and Warehouse in Cebu with ₱107M Tax Liability
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. reports another win in the fight against illicit trade with the recent raid of an illicit cigarette factory and warehouse located in Cebu last October 3 and 5. The BIR estimates around Php 107,756,900.45 in tax liability after seizing 32,545 counterfeit internal revenue stamps, 44, 310 packs of illicit cigarettes, 13 machines used for manufacturing cigarettes and raw materials for cigarettes.
“The BIR raided another large-scale illicit cigarette factory and warehouse. This raid in Cebu uncovered an estimate of 107M in tax liability. The BIR will not stop raiding all illicit trade activities, wherever they may be located. We will protect the legitimate agricultural sector and the thousands of jobs it produces for our Filipino farmers,” Commissioner Lumagui stated.
Several violations of the National Internal Revenue Code (NIRC) were committed by the operators of this illicit cigarette factory and warehouse. These include Section 265(C) Possession of Counterfeit Internal Revenue Stamps, Section 263 Unlawful Possession or Removal of Articles Subject to Excise Tax, Section 265-B Violations Committed by Manufacturers, Importers, Indentors, and Wholesalers of Any Apparatus or Mechanical Contrivance Specially for the Manufacture of Articles Subject to Excise Tax and Importers, Indentors, Manufacturers or Sellers of Cigarette Paper in Bobbins, Cigarette Tipping Paper or Cigarette Filter Tips, Section 260 Unlawful Possession of Cigarette Paper in Bobbins or Rolls, Etc., Section 236 Registration Requirements of the NIRC, Section 254 Attempt to Evade or Defeat Tax, and Section 255 Failure to File Return, Supply Correct and Accurate Information.
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BIR Commissioner Romeo D. Lumagui Jr. (center), BIR Deputy Commissioner Ma. Rosario Charo E. Curiba (left), and a USAID official engage in a discussion during the awarding ceremony held by the United States Agency for International Development (USAID) on October 3, 2024, where the BIR received the Cybersecurity Vanguard Award.
BIR Commissioner Romeo D. Lumagui Jr. (holding plaque) and BIR Deputy Commissioner Ma. Rosario Charo E. Curiba, and USAID officials along with BIR personnel proudly pose after receiving multiple cybersecurity awards, including Cybersecurity Vanguard, Cybersecurity Ironman, and Cybersecurity Champion, from USAID through its Better Access and Connectivity (BEACON) Project.
BIR Commissioner Lumagui & BIR Personnel received Cybersecurity Awards from United States Agency for International Development during Cybersecurity Month
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. received the Cybersecurity Vanguard award from the United States Agency for International Development (USAID) through the latter’s Better Access and Connectivity (BEACON) Project last October 3, 2024. Several BIR personnel also received awards from the USAID.
“The Cybersecurity Vanguard, Cybersecurity Ironman, and Cybersecurity Champion awards given by the United States Agency for International Development to the BIR is an international recognition of our efforts in strengthening our cybersecurity. The BIR values data security, and recognizes the importance of safeguarding sensitive taxpayer information,” Commissioner Lumagui stated.
The BIR was honored with three distinguished awards. These accolades celebrate the BIR and its personnel who have excelled in embodying cybersecurity initiatives and best practices, serving as exemplary models for others.
- CYBERSECURITY VANGUARD – is given in honor of the Bureau’s outstanding leadership and exceptional commitment to the Cybersecurity Capacity Building Initiative. This is a testimony to the Bureau’s strategies to safeguard data and avert breaches that could compromise public confidence, as evidenced by having the most number of employee participations in the said cybersecurity trainings.
- CYBERSECURITY IRONMAN – is given to an individual participant in honor of their remarkable achievement in completing the most number of cybersecurity trainings/workshops hours. USAID-BEACON awarded CYBERSECURITY IRONMAN to five BIR personnel who have demonstrated exceptional skills in cybersecurity defense through their extensive training participation.
- CYBERSECURITY CHAMPION – is presented to two BIR personnel who have played a vital role in upholding cybersecurity best practices, recognized for their significant training hours. The awardees have completed the most number of cybersecurity trainings/workshops sessions under the Cybersecurity Capacity Building Initiative.
“The BIR is grateful to USAID for these awards. We look forward to future cybersecurity trainings,” Commissioner Lumagui stated.